Post-Session Legislative Update – May 2017

Last week, Florida lawmakers officially wrapped up the 2017 legislative session. The budget-focused session lasted 63 days, with a three-day extension called as the result of a complex negotiation process to craft a state spending plan for the coming year. Even now there is much uncertainty surrounding session outcomes, with the budget – the only item lawmakers are constitutionally required to address each year – currently being finalized for delivery to Governor Scott for his review and action. The session started with a tumultuous relationship between the House Speaker and the Governor as the result of a House proposal to eliminate state economic development programs. The bad blood lasted throughout the more than two-month process, and many speculate the Governor could wield heavy use of his veto pen this year, or even veto the entire budget, as a result.

The 2017 session could largely be viewed as a mixed bag. While Senate President Joe Negron and House Speaker Richard Corcoran both saw successful passage of their main priorities, numerous other key issues that were considered critical for lawmakers to address died without agreement between the two chambers. These included reforming state workers’ compensation laws to help businesses stave off the potential impacts of a looming significant rate increase, and implementing the medical marijuana amendment overwhelmingly supported by Florida voters last fall. In addition, while members were able to agree on an $83 billion state budget, the spending plan passed implements more than $500 million in cuts to Florida hospitals – many of which are already strapped due to a largely uninsured or underinsured patient population. In fact, the budget seems to be the biggest sore spot for session critics. This year, legislation known as budget conforming bills seemed to play a bigger role than ever. Several conforming bills, which do not fall under the same rules and requirements as general budget items and cannot be amended on the House or Senate floor, included a great deal of substantive policy issues in the final hours of session.

Delays in the budget process throughout session were caused largely by ideological differences and a complicated relationship between the leaders in the Senate and the House. Ultimately, members were able to come to terms, with both sides making a number of concessions to finalize and pass a plan. Speaker Corcoran saw numerous successes. A vocal critic of the state’s economic development programs, which he refers to as “corporate welfare,” the Speaker ensured funding for the programs was significantly scaled back. He is also a staunch supporter of charter schools and oversaw the passage of landmark education legislation to make it easier for charter schools to open statewide. In addition, the Speaker is a strong opponent of any expansion of gambling in Florida, and new gaming measures failed to pass this session. On the Senate side, President Negron also achieved success on his biggest priorities – passage of legislation to address issues with water storage around Lake Okeechobee, which has already been signed into law by Governor Scott, as well as significant reductions in funding for the state college system (formerly community colleges), and increased funding for the state university system.

On the executive side, Governor Scott’s biggest priorities throughout his tenure in office have been jobs and economic development. With significant reductions in funding for Visit Florida and Enterprise Florida, the Governor has expressed a strong amount of concern and dissatisfaction with the results of session. It will be interesting to see what actions he takes on the budget in the coming weeks. He has the ability to strike individual line items, or even veto the entire budget, and has indicated more than once that he will consider doing so in response to what he sees as a lack of transparency in the process this year.

Additionally, there has been near constant talk since session ended of a special session to address medical marijuana and other possible issues. While there is no indication of when a special session would take place, the possibility is supported by Speaker Corcoran. For a special session to happen, it would either need to be called by the Governor or called jointly by the House Speaker and Senate President.

Budget

In Florida, the legislature is constitutionally required to pass a balanced state budget each year. Many predicted the 2017 appropriations process would be one of the most contentious in recent years. Considering the session was extended due to lengthy, complex budget negotiations, the reality may have even exceeded those expectations. There were a number of big issues at stake this year, including the fate of the state’s economic development agencies, boosts in funding for Florida’s K-12 schools, and hundreds of millions in spending for district or “member” projects.

The plans passed by each chamber in April were around $4 billion apart. While the House proposed a limited, trimmed-down budget, Senate members allocated more in spending for various programs. With the two sides unable to agree on total funding allocations for various sections of the budget until late in session, the conference process was delayed by more than a week, and negotiations stalled several times throughout the final week of session – with members “bumping” numerous items to budget chairs and presiding officers to address. These included a controversial proposal to make $600 million in cuts to Florida’s already strapped hospitals.

Ultimately, conforming bills – legislation conforming state law to each section of the budget – were a key component of the contentious budget process. The 15 conforming bills became more complex and critical than ever this session, with many loaded up with numerous policy changes – including a controversial education funding measure passed the final day of session. While the actual budget bill comes with a required 72-hour “cooling off” period, conforming bills do not have the same requirement. The controversial provisions tacked onto those bills in the final days of session became the ultimate showdown between lawmakers, with both sides eventually making concessions – the Senate more so than the House – so that the $83 billion spending plan could be voted on and prepared for the Governor, and the 2017 session could finally wrap up.

Economic Development and Incentives

Throughout his time as leader of the state, Governor Scott has made economic development and jobs his top priorities. Over the years, these efforts have included a number of tax cuts and proposals to increase funding for economic incentive programs to draw companies and jobs to Florida. However, these incentives have been under scrutiny in recent years, with many questioning the effectiveness of the programs and whether or not the state funding that backs them is money well-spent. Leading the charge has been Speaker Corcoran, who released a proposal early in session to eliminate the majority of the state’s economic development programs. This proposal caused tension between the Governor’s office and the House, which lasted throughout the more than 60 days of session.

The two agencies under scrutiny this session were Visit Florida and Enterprise Florida. While many predicted this could be one of the biggest showdowns of the session between the two chambers, the funding was agreed upon fairly early in the process compared to other issues, with members allocating $16 million for Enterprise Florida and $25 million for Visit Florida. However, late in the process Speaker Corcoran added language in the conforming bill that tied the funding for Visit Florida to new rules regarding travel and employee salaries. The language was eventually accepted by the Senate. These efforts are not likely to sit well with Governor Scott, who called for $100 million in funding for Visit Florida and more than $100 million for Enterprise Florida. While reports early in session indicated Speaker Corcoran was building enough support to override any potential veto by Governor Scott, the bill is actually five votes short of being veto-proof.

In addition to economic development, members also passed legislation relating to property taxes – another priority of Speaker Corcoran. Under the measure, a constitutional amendment will be placed on the 2018 ballot to expand the state’s homestead exemption program by an additional $25,000.

Education

During the recent session, as in most years, members addressed a number of issues relating to state K-12 and higher education policies and funding. There were numerous education bills considered by members over the past two months – most tied to large amounts of funding and left without final decision until the last moments of session. Many of the K-12 changes were ultimately outlined in nearly 300 pages of budget conforming language released late in the process – an issue criticized by the media and public for being handled behind closed doors rather than in the “sunshine,” as is required by state law. As session ended, education funding and policy became a matter of ultimate compromise between the two chambers, with the Senate accepting Speaker Corcoran’s K-12 priorities, and the House accepting key, longtime priorities of President Negron relating to state colleges and universities. While many Senate members expressed reluctance to support the late-filed language proposed by the House, it was understood that agreement was necessary for session to wrap up.

Key among the K-12 education measures considered this year was the “schools of hope” bill – a priority of Speaker Corcoran. The measure, which allocates funding and puts provisions in place to make it easier for charter schools to open in areas where traditional public schools are failing or struggling, was ultimately included in the language passed. The comprehensive bill, which Speaker Corcoran referred to as “the greatest education K-12 policy passed in the history of the state,” also includes expansion of the “Best and Brightest” bonus program, as well as a measure amending the way local and state funding is shared between charter schools and traditional public schools, and a continuation of efforts to amend and scale back the state’s standardized testing policies. In addition, members addressed issues relating to Title I funding and providing more federal dollars the state receives to charter schools.

On the higher education front, much of the discussion this session surrounded a push by President Negron to make steep funding cuts to state colleges in Florida. While many criticize the move to cut colleges while at the same time boosting funding for state universities, this has been a longtime priority for Negron. The language was included in a comprehensive higher education package passed in the final hours of session to implement the newly-created “College Competitiveness Act.” The measure includes a number of provisions to increase funding for state universities and amend tuition requirements, while implementing new rules regarding the way the state’s 28 state or community colleges are governed. The ultimate result is nearly $8 billion in overall funds for higher education, with roughly $30 million in permanent cuts to state colleges.

Also on the higher education front, members pushed legislation through this session to expand online course services offered by colleges and universities. However, Governor Scott weighed in during the last week of session, expressing concern about the state joining an alliance with schools in other states to offer online programs. Governor Scott wanted to ensure that Florida could withdraw from any alliance or compact. Lawmakers amended the language to reflect the Governor’s request.

Energy, Environment and Land Issues

Environment and water issues were some of the most discussed and debated this session. Key among them was a Senate proposal to address water quality and discharge issues in Lake Okeechobee and its surrounding land and water bodies. What ultimately passed after much debate was a comprehensive plan to provide for Everglades water storage and allocate $800 million in bonding authority for the project. While the original proposal called for the state to acquire 60,000 acres of farmland south of the Lake to build a reservoir, it was highly controversial. The final plan involves utilizing around 30,000 acres of land already owned by the state for reservoirs. The issue will continue next year, with funds for additional state land acquisition already set aside in next year’s budget. The legislation passed by lawmakers this session has already been signed into law by Governor Scott.

Funding for state environment and natural resources programs became one of the most contentious areas of budget negotiations this year. As conference began, Senate leaders had several large priorities for environmental spending, but the House countered on most of them. What resulted is a plan allocating funding for beach recovery and renourishment, hurricane recovery efforts, and more than $100 million for Everglades restoration. The plan also includes $50 million for springs restoration and more than $13 million for St. Johns River and Keystone Heights lake region projects, but no funding for the Florida Forever program. In addition, lawmakers allocated funding to continue implementation of 2014’s Amendment 1, approved by voters for water and land conservation programs. However, this year’s funding has been criticized by environmental groups, as it applies to salaries and benefits and other operational costs instead of actual land conservation.

Lawmakers also focused on various energy and environmental policy issues this session. Key among them was legislation to implement a solar amendment approved by voters during the primary election last August. The measure passed by members extends the state’s solar tax exemption to businesses as well as residences. It will now be sent to Governor Scott for approval. Members also filed proposals again this year to establish a statewide ban on fracking, but the legislation never progressed through the committee process.

In addition, members worked to determine the best way to distribute funds from the 2010 BP oil spill to eight counties throughout the Panhandle area. After much discussion and debate, the House and Senate finally came to agreement during the final week of session on a plan distributing millions in funds for damage related to the spill. Under the measure, the eight Panhandle counties hit hardest by the oil spill will receive $300 million, with guidelines on how the money can be spent. The measure still needs to receive final approval from Governor Scott.

Gaming

The topic of potentially expanding gaming in Florida has been debated by lawmakers for the past several years. Measures for gambling expansion in the state, particularly in South Florida, have been strongly backed by Vegas-style casinos, but have ultimately failed to pass through the legislative process.

Early in session, the House and Senate introduced their respective gaming proposals, with stark differences between the two plans. With Speaker Corcoran opposed to gambling, the House proposal was largely limited to addressing the state’s gaming compact with the Seminole Tribe of Florida. The bill introduced by the lower chamber explicitly banned new slot licenses in the state and aimed to limit the ability of counties to pass their own measures relating to slots. On the Senate side, the measure included potential expansion of gaming to include new slots and blackjack in South Florida, in addition to establishing a new compact with the Tribe.

As the end of session approached, members in both chambers worked to negotiate the stark differences between the plans. While the House proposed to essentially freeze gaming activity in the state, many compromises were made throughout the negotiation process that would have resulted in new gaming policies very different from the House’s original goal. However, negotiations collapsed during the last week of session due to a proposal pushed by President Negron to allow eight counties where local referendums were passed to add slot machines to existing dog and horse tracks. This essentially killed any efforts to pass gaming legislation this session.

Health Care

Health care has been a contentious topic among Florida lawmakers for several years now, with differences between the two chambers typically surrounding the state’s Medicaid program. However, this year’s big health care debate came down to the final days of session and centered around proposed funding cuts for the state’s hospitals. The issue eventually caused additional delays in an already-contentious budget process, and ultimately resulted in a three-day extension of session. While members expressed early in the process that cuts to hospitals would be likely to address potential state revenue shortfalls in the coming years, the proposed cuts were steep and drastic.

As the budget conference process began in late April, lawmakers received word that Florida would receive $1.5 billion in federal funding for the state’s Low Income Pool (LIP), which reimburses hospitals for serving uninsured and underinsured patients. However, the funding was not included in the budget passed by members, with lawmakers instead planning to determine how best to distribute the funds at a later date, as federal officials have yet to outline terms and conditions for the funding. The total cuts for hospitals ended up just over $520 million – a steep amount that will fall largely on facilities that serve low-income patients through the Medicaid program – primarily, the state’s safety net hospitals.

Members did also address issues relating to the state’s Medicaid program this session. While a measure to restructure the program from 11 regions statewide to eight larger regions was considered in the final hours of session, the legislation became weighted down with amendments adding language from other bills, and ultimately died without passage.

There were also a number of other health care proposals considered, but nearly all failed to pass successfully through the legislative process. These measures dealt with issues ranging from nursing education, nursing homes, expanding practice abilities of advanced nurses, and implementing policies relating to telehealth. In addition, a controversial measure to eliminate the current “certificate of need” process, which regulates the building of hospitals in Florida, ultimately failed. Also among the numerous health proposals not passed by lawmakers were a measure to allow ambulatory surgery centers in Florida to hold patients for up to 24 hours, as well as legislation that would have allowed patients to contract directly with doctors for basic health services – known as the direct primary care bills.

Medical Marijuana

While the issue of medical marijuana was previously considered controversial, a proposal to allow for its use in Florida was overwhelmingly approved by voters last November, with a constitutional amendment securing more than 70% of the vote. The amendment passed during the general election legalizes medical marijuana as treatment for patients with various serious medical conditions. This session, House and Senate members worked to determine how the new amendment should be implemented. Unfortunately, lawmakers were unable to come to agreement on final language and, even though members worked until the final hours of session to resolve the issue, no legislation was passed to implement the medical marijuana amendment.

Members in both chambers filed proposals early in session to create a system for the growth, prescription, and use of medical cannabis in Florida. The proposals addressed the number of allowed licenses for growing and dispensing organizations, product quality and oversight, requirements for doctors prescribing medical marijuana to patients, and conditions eligible for treatment, among other matters. The ultimate sticking point between the two chambers was the total number of dispensaries each licensee would be allowed to have. At this point, it will be up to executive branch officials at the Florida Department of Health to put a framework for the new law in place. However, there have been numerous calls for a special session to readdress the issue – including from Speaker Corcoran. This issue is one that will continue to be addressed over the next several months.

Transportation and Infrastructure

Each session the House and Senate transportation committees put forth their respective legislative packages, which include priorities outlined by the Florida Department of Transportation and Department of Highway Safety and Motor Vehicles for the year. These bills are typically heavily debated and amended throughout the session. This year was generally quiet with regard to transportation issues, but lawmakers did pass a transportation package late in session.

Members also considered and passed ride-sharing legislation – a big win for Florida’s free market, and companies like Uber. The legislation was heavily supported this year and has already been signed into law by Governor Scott. In addition, members passed legislation creating regulations for unmanned devices, including drones.

On the funding side, members increased transportation funding by more than $130 million from last year.

Workers’ Compensation

Florida has been faced with the potential for major changes to its workers’ compensation policies in recent years, with the tipping point coming last year as the result of two landmark Florida Supreme Court decisions. Prior to the rulings, it had been about 14 years since the state enacted any major changes to the workers’ compensation system. The major effect of last year’s rulings was a 14.5% increase in rates. As a result, lawmakers were very focused on this issue throughout the session, aiming to rework and reform the state’s workers’ compensation laws. Unfortunately, members were unable to come to agreement and the legislation was not passed.

With plans to address issues regarding attorney fees and the rate-making process, legislation offered by both chambers included provisions regarding the length of time benefits would be available, as well as caps on attorney fees. However, the attorney fees were the ultimate sticking point that could not be negotiated between the chambers, as the House wanted to cap fees at $150 an hour, and the Senate wanted a cap of $250 an hour.

With the looming increase and the potential for an additional 20% increase next year, business groups around the state have expressed great disappointment about the lack of any successful legislation to address the matter.

Going Forward

While the 2017 session has officially adjourned, it is far from over. With several issues left unresolved, including a state budget largely opposed by the Governor, as well as numerous bills that have yet to be sent to the Governor’s desk, most actions taken by lawmakers during session still face an uncertain future. When it comes to the budget, the Governor has the power to veto individual line items, or could even veto the entire spending plan. Conforming bills have to be either passed or vetoed altogether. With such heavy policy issues wrapped into conforming bills this year, it will be very interesting to see what actions the Governor takes on all budget products passed by lawmakers. For regular substantive legislation, the Governor has 15 days to take action once he receives a bill. He can either sign the bill into law, veto it, or let it become law after the 15 days without his action.

In addition to the issues outlined above, there is still the potential for a special session to address medical marijuana and other possible unresolved issues.

Once all actions are taken with regard to the 2017 budget and legislation, lawmakers will have a limited amount of time off before reconvening in Tallahassee to prepare for the 2018 session. Since session will take place two months earlier next year, a practice lawmakers are now implementing in election years, members are likely to be back in Tallahassee for committee meetings around September, and will convene to kick off the 2018 session in January.